Investing in a Forex Trading JV is an activity that lends itself well to an “Offshore” Corporate Structuring Plan.
Usually the deal provides that the investor contributes capital and the Forex Trader provides the knowhow, (ie does all the Trading) and profits are split between the Trader and the Investor (ie you) eg 50/50 or 60/40 or 70/30 ie whatever you manage to negotiate.
How it works is:
(a) You incorporate a tax free Offshore Company (“OC”)
(b) You structure the Company in such a way as to ensure that the Company is seen to be managed and controlled from Offshore; This can/will be achieved by via deployment of a tax haven based Nominee Director (which is a service that OCI can provide)
(c) Your OC signs a general investment agreement/contract with the Forex Trading Company. This agreement sets out what each party will do and how profits will be shared (and when)
(d) You advance funds to your OC
(e) The OC then advances funds to the Forex Trading Company
(f) The Forex Trading Company invests/trades your money
(g) The Forex Trading Company pays a return periodically to your OC (eg monthly or quarterly or 6 monthly or yearly).
(h) Returns paid to your OC will be banked and or reinvested Offshore potentially free from tax
(i) To minimize the chances of local Controlled Foreign Company laws being applied to your Offshore Company (and or if your local tax man has the power/wherewithall to tax an Offshore Company if you are the “beneficial owner” thereof), ideally, you would not want to be seen to be the beneficial owner of the Company. This can be achieved by deploying a Private Foundation to act as the shareholder of your nil tax Offshore Company.
Note if you need to draw on or utilize these returns at home there are several ways to discreetly go about this (including options potentially with zero tax implications).
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